The most important problem in the farm sector is that the international price for agriculture commodities, the market price, and the MSP, are very different.

India’s farm sector may create a big economic crisis for the country as the minimum support price (MSP) for crops is higher than the market and international prices. The most important problem in this sector is that the international price for agriculture commodities, the market price, and the MSP, are very different, Union Minister Nitin Gadkari said in a webinar, PTI reported. Highlighting the roadblocks in the farm sector, Nitin Gadkari added that some political problems are also there, which makes it difficult for the government to take decisions.

Talking about the high minimum support prices for crops, the minister stressed on finding alternative solutions before an economic crisis is created. The government seemed concerned about high MSPs because it can hinder the acceleration of the economy as it may cut purchasing power in the agriculture sector. 

Addressing other major problems of the farm sector, MSME and transport minister Nitin Gadkari underlined that the agriculture sector is self-sustainable as it has surplus rice and wheat for three years but the country does not have enough storage facilities to store them. However, to make effective use of surplus rice, the government has suggested a policy aimed at converting rice into ethanol or bio-ethanol.

Also Read: Indian economy from ICU to sprint race in one year; these steroids will bring GDP growth to life

The vulnerability in the farm sector has been pointed out at a time when India’s economy is already going through a rough phase and agriculture is being seen as a front-runner. Agriculture Minister Narendra Singh Tomar had earlier said that India’s economy cannot contract in this fiscal year as agriculture alone will make India’s GDP to grow in positive territory. However, when RBI, economists, and rating agencies have unanimously estimated India’s GDP to contract, Nitin Gadkari’s fear of a big economic crisis has come as another blow. 

Meanwhile, earlier this month, the agri minister announced 50-83 per cent hike in MSP for 14 kharif crops. MSP for cotton was increased by Rs 260 to Rs 5,515 per quintal and paddy by Rs 53 per quintal to Rs 1,868 per quintal for the financial year 2020-21. 50 per cent hike in MSP was also announced for Ragi, Moong, Groundnut, Soyabean, and Til for the current fiscal year.